Jio Financial Services, owned by Mukesh Ambani’s Reliance Industries, is reportedly in talks to acquire Paytm’s wallet business, following the Reserve Bank of India’s (RBI) ban on Paytm Payments Bank from accepting deposits or credits.
Shares of Jio Financial surged up to 14% after reports revealed discussions between Paytm’s parent company, One 97 Communications, and Jio Financial, along with HDFC Bank, to potentially acquire Paytm’s wallet business.
The talks between Paytm and Jio Financial reportedly began in November, while discussions with HDFC Bank initiated shortly before RBI’s ban on Paytm Payments Bank.
This potential acquisition is seen as part of a larger bailout plan for Paytm, which is grappling with an existential crisis due to regulatory restrictions.
Paytm has faced controversy and scrutiny from agencies, investigating potential money laundering through the platform.
Despite Paytm denying all allegations, its shares plummeted by 42% in just three days following the RBI directive.
Jio Financial’s ownership of Jio Payments Bank, with its re-platformed digital savings accounts, bill payments, and a network of 2,400 business correspondents, positions it as a frontrunner in acquiring Paytm’s wallet business.
During a virtual town hall with employees of Paytm Payments Bank Ltd (PPBL), Paytm CEO Vijay Shekhar Sharma reassured the team, stating that they are working to understand the situation and will reach out to the RBI for resolution.
The potential acquisition by Jio Financial adds an interesting dimension to the evolving scenario in India’s financial technology landscape.